The move by California to require mandatory cuts in water use for the first time in its history has highlighted the world’s looming water crisis and increased the focus on the links between sustainable water and sustainable energy.
“We need a new paradigm,” said Steven Solomon, author of Water: The Epic Struggle for Wealth, Power and Civilization. “The days when we could just go further into the mountains and find new sources of water are past. We need to make better use of the water we have.”
The good news is that this offers opportunities for investors in everything from IBM’s development of smart metering for water use to more mundane technology like devices to detect water leaks.
“Mexico City loses 40 to 50% of its water to leaks,” said Solomon. “American cities lose 20 to 30%. Finding those leaks alone could save a lot of water.”
The new “toolkit” for dealing with the water crisis already exists, Solomon said, with a number of techniques available for “adaptive systemic management” of water.
Wastewater treatment, for instance, can recycle water and save energy at the same time. “The sludge can be used as fuel to provide energy for the treatment,” Solomon said.
Individuals can do much of this themselves, recycling their own wastewater as “gray water” for things like watering the lawn that do not require drinking quality water.
In the wake of California’s announcement, the Ygrene Energy Fund pointed out that property-assessed clean energy (PACE) financing can be used for water upgrades as well.
“Though PACE financing is widely recognized as a mechanism for funding residential solar power, Ygrene Works PACE financing also offers funding for rainwater cisterns, water saving sprinkler system, drip irrigation, artificial turf and low flow plumbing,” the fund said in a statement.
The financing can also help property owners pay for water-saving upgrades that ease the impact of regulations prohibiting water use.
The long-term drought cycle in California and the U.S. far west has long been predicted, but the water crisis goes well beyond this regional phenomenon.
Tetra Tech said last week it has been awarded a five-year, $1 billion contract from the U.S. Agency of International Development (AID) to collect data and develop innovative approaches to cope with pressure on water resources from climate change, population growth, and energy demands in developing countries.
Schlumberger and Halliburton have been working to address the massive use of water in hydraulic fracturing for oil and gas by developing ways of recycling the water used in the process.
“Companies are in the forefront of dealing with this crisis,” said author Solomon.
But governments, too, from municipalities to international organizations like the World Bank, are focusing more attention on water issues.
New York state legislators are trying to get a $250 million grant program to assist municipalities in funding water infrastructure projects that they can leverage with further borrowing.
The World Bank has scheduled a special panel discussion on water sustainability in conjunction with the spring meeting of the IMF/World Bank in Washington this month that will bring together experts from California, Nevada, Brazil, Namibia, and Morocco, along with project managers from the bank.
This is the kind of response that is necessary, according to Solomon. Water sustainability will require big projects like restoring wetlands and forest, adapting reservoirs and distribution systems, and even renegotiating longstanding water rights contracts based on assumptions that are no longer valid.
“We have to look at the water ecosystem in a holistic way,” he said, “if we want to be sure there is enough water in the system.”
Originally written for OilPrice.com, a website that focuses on news and analysis on the topics of alternative energy, geopolitics, and oil and gas. OilPrice.com is written for an educated audience that includes investors, fund managers, resource bankers, traders, and energy market professionals around the world.